Magic Leap Reportedly Exploring Sale

Magic Leap is exploring strategic options that include looking for a buyer, Bloomberg reported Wednesday. This isn't surprising, since consumer electronics are hard and AR hardware is harder.

What is surprising, though, is Magic Leap aiming for a $10+ billion price tag. The Florida startup has raised roughly $2.6 billion from a slew of high-profile backers but has reportedly struggled to sell its first-gen headset.

• Bloomberg sources floated Johnson & Johnson and Facebook as potential acquirers. But Facebook lost interest before any serious talk of a deal materialized.

TechCrunch's Josh Constine threw cold water on the notion that a Magic Exit could fetch $10 billion: "It's the kind of number a prideful company might strategically leak in hopes of drumming up acquisition interest, even at a lower price." One analyst said Magic Leap would be "very lucky" to sell for $1 billion.

Bottom line: Due to technical challenges and costs, consumer AR eyewear is years away. A Facebook, Microsoft, or Apple can play for the long term, but it's a steeper climb for Magic Leap, which is burning through cash with limited runway.